Get more for less?
I have discussed the need for an Electronic Data Integration (EDI) strategy so that you can fully utilise the service if you use an EDI Managed Service Provider (EDI MSP).
These blogs are aimed at small to medium sized businesses that might think that EDI is out of their reach. It also considers that the business uses an Enterprise Resource Planning (ERP) system plus other systems that might be internal as well as external to the business.
These thoughts that I am sharing consider that the business does not have the cost base and experience to support some form of dedicated Application Programming Interface (API) solutions plus Zero Trust, please refer to https://www.ibm.com/topics/zero-trust for more detail.
In a world where margins are being squeezed, there are more and more connected add on systems and now hosted solutions coming under cyber-attack there is so much more to consider.
An order is an order
Where could an order be generated from?
A retailer placing a bulk wholesale order
A retailer placing a Drop Ship Vendor (DSV) order
A marketplace
Your website
A replacement order from your Customer Relationship Management (CRM) system
Would you use different solutions to support each of the routes to market or just one?
I have seen many instances of multiple systems in place adding additional costs and complexity to the business.
Within these business process models I have seen orders being downloaded manually and then uploaded into the ERP system alongside some form of automated processing albeit an EDI solution that processes order data via an interface rather than continually running on a schedule.
Possible solutions to this conundrum
Retailers
If you are trading with retailers, you might be expected to support some form of EDI integration.
There are options available to you such as supporting your EDI processes internally if you have the skill set, hardware, software and knowledge in house. Otherwise, you can outsource to an EDI MSP.
I will admit that I am an advocate for using an EDI MSP. If you in house the solution you don’t just need to understand the various EDI standards that you are being presented with; you will also need to understand and support the communications standards along side managing the hardware on software packages.
Communications are an art form in themselves, and I have seen EDI MSP’s struggle.
Marketplace
There are solutions available to you that will extract your order data and send this to you, at a price. Will this price be a flat fee or a percentage of the order value?
Your website and CRM systems
This is where the API evangelists will say that you need to put an API between the website and the ERP system.
Will the API work directly with the ERP?
Most modern ERP systems will have an API interface but you need the skillset in house to be able to develop and support this processing model.
How will the API cope with incorrectly formatted data? Unfortunately the world is not perfect and corrupted data will invariably be sent to you.
Multiple routes into your ERP system
With each connectivity option you increase the number of entry points into your system. This is at a point in time in which internet security is under the spotlight with the increase in cyber-attacks.
With the multiple routes into your system will you then have multiple processes to manage and support.
There is another option
As stated previously this discussion is aimed at small to medium businesses that are setting out on their trading journey.
It will be quite daunting to consider how to enable a solution that can take you forward processing orders from multiple systems and multiple routes to market
However, it is possible to work with just one EDI MSP and process from multiple sources. This will reduce:
Your costs in terms of software and FTE
Your entry points into your system
Complex processing solutions
Support
This will then maximise your development spend.
Watch out for the costs that might come with an EDI MSP
If you were to go down this route you will need to ensure that you are paying an agreed fee rather than charges that consider each additional connection plus the charges applied to the kilobytes of data that will be processed.
There are EDI MSP’s that do support a fee structure rather than charging by each connection plus the data that is be processed.
Also ensure that you consider the storage costs of EDI Invoices so that you comply with the HMRC rules on EDI Invoicing.
Views from the edge
In my time I have seen many developments where solutions have been bolted into the overall technology landscape.
I have also seen solutions in place that do not enable the business to grow as the solution limits you to one platform.
If a business has produced a product that can be sold directly, through marketplaces or through retailers they need to consider how they will support these various routes to market and how they will service these accounts.
There are many systems available. Each will come at a price. This will be some form of license plus then support from your staff.
In the early days of starting up the business a solution to support these many routes to market is possible. However, you do need to consider how you will be trading.
As the business grows you might then want to decouple aspects of what I have discussed above. This would be far simpler than trying to bolt a solution into what could already be a complicated technology stack.
Let’s keep it simple
Trading with retailers is not as simple as supporting the processing of orders.
Some retailers need orders acknowledged within an agreed period of time. They might want you to support Serial Shipping Container Codes (SSCC) for your deliveries. As retailers are trying to reduce costs, I have found EDI Invoicing is a requirement.
You might also want to connect to third party logistics (3PL) companies who manage your stock and deliveries to your customer base.
The overall solution that is developed will therefore need to support far more than processing orders.
The simpler the solution the simpler it will be to deliver to these retailers over time.
I hope these thoughts aid your own thinking and possibly challenge what you see either on the internet or in the press. We are after all selling our services.
There is so much more to trading via EDI 😊